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Thread: Leasing vs Buying a car

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    Veteran Member Jenna78's Avatar
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    Default Leasing vs Buying a car

    I am looking at buying/ leasing a new car. Does anyone have any opinions/cautionary tales on leasing vs buying a car. I would really like a Toyota, preferably a hybrid, if that makes any difference. Thanks in advance!

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    Default Re: Leasing vs Buying a car

    If you aren't fussed with having a new or used car then go used. I bought a Toyota Corrolla (1988 ) for under $2000 AUD. After spending an extra $1000AUD she works like a charm!

    I would only buy brand new if I could buy the car out-right otherwise it is worth buying a car (make/model that you want) that is a couple of years old. Just look for motivated sellers (individuals) not necessarily actual second hand/used car yards.
    Last edited by GoldCoastGirl; 08-21-2006 at 01:48 AM.


    enter: E3167322D9 for your 10% discount

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    God/dess Deogol's Avatar
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    Default Re: Leasing vs Buying a car

    I'm with GCG, I would go with a used vehicle.

    Leasing is a total rip off unless you plan on buying the car out right in the end. All the little nickel and dime stuff like extra miles, scratches, dog hair, spilt pop/coffee, etc. adds up. Plus, you are like, driving around in what amounts to someone else's car!

    If you must get a new car, I would buy it.

    If you are worried about a used car, I am sure you can get a mechanic's shop to look it over for 50 bucks or so to let you know what you are getting.

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    Temporarily Banned Vaughn's Avatar
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    Default Re: Leasing vs Buying a car

    Owning a car is a almost always much better investment than leasing. In addition, I would suggest never buying brand new because most new cars lose a ton of their value as soon as you drive it off the lot. Consider looking for one that has low miles instead.

    For example, I just bought a 1 year old Honda Civic Hybrid a few months ago from CarMax. It only had 11,000 miles on it and it looks and drives brand spanking new. I paid ALOT less than if I had bought new.

    I also suggest not getting into a loan situation unless you have no other options. You may have to buy a car that isn't as nice as you would like but at least then it is all yours

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    God/dess Emily's Avatar
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    Default Re: Leasing vs Buying a car

    for hybrids, though, it's not really worth it to get used...

    You don't get the tax rebate unless you are the orginal owner (you don't get it at all if you lease, the leasing company does) and they are in such high demand that they don't deprciate as much in value as a regular car would. Depreciation is pretty much what a lease payment covers, so when you turn it in, they make out big time by being able to sell it close to what you paid!

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    God/dess Bridgette's Avatar
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    Default Re: Leasing vs Buying a car

    If considering buying a used hybrid, you'd have to consider how much the tax incentive would be if you bought it new, vs. your price savings for buying a nearly new used one. If the tax incentive is more than the used car savings, then go new. If you'd save more by buying a slightly used model, do that.

    I would NOT lease a hybrid. Or any car for that matter. Leasing is really only good for businesses that can write off the lease payments, not for individuals who only use the car to commute. The lease terms may sound great going in, but they will RAPE you out the back door and all the home and back again. And no, strippers do not qualify for the lease payment tax write-offs because we only use our cars for commuting.

    Point: Buy, don't lease.

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  7. #7
    BrunetteGoddess
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    Default Re: Leasing vs Buying a car

    Ugh, if you drive on a regular basis, DONT LEASE. My husband drives a normal amount and he's already over on miles. I hate having restricted milage, it's bogus.

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    Banned Melonie's Avatar
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    Default Re: Leasing vs Buying a car

    leasing a car or anything else is technically little more than a longer term rental agreement with option to buy.

  9. #9
    Sitri
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    Default Re: Leasing vs Buying a car

    I would never buy a new car, I always lease them. And, I never lease for longer than 39 months. That way I get to try it out for 3 years and then decide if I want to keep it.

    Typically, the residual value in a lease..(what you have the option to buy it for) will be kept high in order for the leasing company to keep the payment low. You have the option to buy the car at that point or just turn it in.

    I lease because when you want to trade a car or sell one you get screwed on the back end with the dealer telling you that you car isn't worth what you think it is. (The lowball)

    While it is as Melonie says " an option to buy"; it is a not necessarily a bad thing.
    You have to compare the cost of the lease for the same period with the cost of buying. And, you have to make sure they give you the best lease factors you qualify. Some dealers use a product called "LeaseLinc". It is a software product that contains all of the residual factors and lease factors for all of the banks and auto financing companies. If they use this product, they can find the best deal for you. You will have to shop a couple of dealers to get the best price on the car and the best rate.


    Getting out of a lease is slightly harder but no more so than an auto loan. The key to any transaction is getting a good purchase price on the car and a good interest rate or lease rate. If you don't, there is a good chance that if you have to get out of the loan or lease early, what the car is worth will be less than what you owe. This is called being "upside down".

    You can check out cars that are on lease and people want to get out of on

    There is another thread on this from a couple of years ago.

    That said, any car you finance will require you to carry comp and collision insurance and depending on your driving record, the insurance payment may be more than your auto payment. Check with your insurance agent before you actually buy the car to find out your insurance costs. If you buy a cheaper car (<$4,000) you may be able to get a non-secured loan/rate and carry liability only insurance to save money.

    Compare used car prices on and
    actual cars on

    I actually helped my nephew buy a used cherry 2003 Pontiac Grand Prix 2 months ago from a dealer for $10,000 flat. The NADA retail was $12,800. He could finance it for 80% or $10,240. So he got more of a loan than he paid for the car. (So, before you buy or lease any car ... KNOW THE LOAN VALUE)

    Good luck.
    Last edited by Sitri; 08-21-2006 at 06:19 AM.

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    Temporarily Banned Vaughn's Avatar
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    Default Re: Leasing vs Buying a car

    If considering buying a used hybrid, you'd have to consider how much the tax incentive would be if you bought it new, vs. your price savings for buying a nearly new used one. If the tax incentive is more than the used car savings, then go new. If you'd save more by buying a slightly used model, do that.

    Good advice. Thanks for adding that part as I totally forgot to include it.

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    Default Re: Leasing vs Buying a car

    Also, take your living area into consideration. When you lease a car, you are responsible for all damages, over-mileage, etc that occurs while you have the car. So, if you live in the city of chicago and street park...your bumpers are going to be scratched to hell and back and you're responsible for having them replaced/repaired...if you put more than 12,000-15,000 (depending on lease agreement) per year on your car...you are usually charged around $0.20 - $0.50 PER MILE over. That can cost thousands of dollars at return time...in addition to the fact that you need to put a couple grand down in down payment...and you need to come up with another down payment to get another car.

  12. #12
    Jay Zeno
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    Default Re: Leasing vs Buying a car

    I've bought used, I've bought new, I've leased. My advice, based on experience, is:

    1) Buy used (except listen to the good advice on the hybrids).
    2) Buy new.
    3)
    4)
    5) Lease.



    Mel will be astonished, but I agree with her. Leasing meant I got the opportunity to pay for the car twice.

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    Banned Melonie's Avatar
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    Default Re: Leasing vs Buying a car

    Jay we agree rather often when the whole financial equation being discussed is 'visible'. We only seem to disagree when some major financial components are 'disguised' or time delayed or come from a supposedly unrelated different pocket or are otherwise obscured from direct view.

    As to hybrids, NEVER NEVER NEVER consider buying a used one unless it is priced unbelievably low. The reason is that at some point (like 60k-75k-100k miles, nobody really knows yet) the entire battery pack is going to have to be replaced at a cost of many thousands of dollars. Original owners carry manufacturer's warrantee protection on battery replacement, where odds are that a used hybrid buyer will have to foot the battery replacement bill out of their own pocket.

  14. #14
    Sitri
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    Default Re: Leasing vs Buying a car

    Quote Originally Posted by Jay Zeno
    I've bought used, I've bought new, I've leased. My advice, based on experience, is:

    1) Buy used (except listen to the good advice on the hybrids).
    2) Buy new.
    3)
    4)
    5) Lease.



    Mel will be astonished, but I agree with her. Leasing meant I got the opportunity to pay for the car twice.
    I guess I would be interested in seeing that calculation...

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    Veteran Member Rockette's Avatar
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    Default Re: Leasing vs Buying a car

    I'm sorry, but I cannot see how leasing a car is ever a good option. It seems you give up too many privledges compared to outright owning the car because of the mileage limitation first and foremost. You also cannot personalize the car much in any because it violates the lease aggreement, or pay to have it restored to its former shape before trading it in. You also pay the same amount on a car that rapidly depreciates in value the minute you drive it off the lot (true of a finance too, but you actually have an asset after you finnish the payments). I know it was said that you have dealers low balling you on trade in values when it is time for a new car... but you don't have to trade your car in at all. You could always sell it privately (use autotrader.com... it will sell probably within six months) if you have the patience, and you will also get more money for it. Lastly, another great thing about financing a car is that someday you have the hope of having no car payment to worry about at all. Just my 2 cents.
    Isocrates: “Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress.”

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    Temporarily Banned Vaughn's Avatar
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    Default Re: Leasing vs Buying a car

    Quote Originally Posted by Melonie

    As to hybrids, NEVER NEVER NEVER consider buying a used one unless it is priced unbelievably low. The reason is that at some point (like 60k-75k-100k miles, nobody really knows yet) the entire battery pack is going to have to be replaced at a cost of many thousands of dollars. Original owners carry manufacturer's warrantee protection on battery replacement, where odds are that a used hybrid buyer will have to foot the battery replacement bill out of their own pocket.
    WRONG

    For the truth abouth hybrid battery packs please see #2 in this link:

    The standard warranty on hybrid batteries and other components is between 80,000 and 100,000 miles, depending on the manufacturer and your location. But that doesn't mean the batteries will die out at 100,000 miles. The Energy Department stopped its tests of hybrid batteries -- when the capacity remained almost like new -- after 160,000 miles

    here is another link that debunks the battery replacement as well as other anti "green" propoganda :
    Last edited by Vaughn; 08-22-2006 at 04:48 PM. Reason: cleaning to stick to just the facts

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    Banned Melonie's Avatar
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    Default Re: Leasing vs Buying a car

    if that's really the case then why is Honda extending 'goodwill' additional battery replacement warrantee coverage to hybrid owners (i.e. to prevent the owners from getting pissed off by a $3600 battery replacement bill when their Honda Insight batteries fail at 81,000 miles) ? There would be absolutely no reason for Honda to do this if hybrid batteries actually lasted the 160,000+ miles as your link speculates, simply because hybrid cars haven't been around long enough to have been driven 160,000 miles yet.

    "



    {snip}"For those that experience battery failure within the warranty period, manufacturers are standing behind their product and providing replacement units. [Honda's battery warrantee is 8 years or 80,000 miles - sic]

    In some cases Honda has even provided additional "goodwill coverage" for at least a portion of the bill for hybrid battery replacement even after the warranty has expired. Although normally, if there is a battery failure after the warranty is expired, consumers should plan to cover the bill themselves.

    To purchase a brand new hybrid battery from a dealer, the price for a Honda Insight Hybrid battery is around $3600."{snip}
    Last edited by Melonie; 08-22-2006 at 03:13 PM.

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    God/dess Emily's Avatar
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    Default Re: Leasing vs Buying a car

    if Honda believes their battery is good, and the general consumer is unsure, why not offer the extra guarantee? Just offering it doesn't mean they don't stand behind the original product.

    By that same logic, you could say that anything that has a warranty is crap.

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    Default Re: Leasing vs Buying a car

    the point is that there ARE already Honda hybrid owners who are coming back to dealers with battery failures. Those that occur below the 80,000 mile mark are covered by Honda's warrantee. Those that occur past the 80,000 mile mark are not covered by warrantee and would cost the owner $3600 out of pocket.

    Honda has volunteered to pick up at least part of this out-of-pocket battery replacement cost for hybrid vehicles with more than 80,000 miles as a matter of corporate policy, which tends to indicate that the number of Honda hybrid owners that are experiencing out of warrantee battery failures must be substantial. If it were only one or two cases then Honda would never volunteer to subsidize the out-of-warrantee battery replacement cost by spending two or three thousand dollars out of their own corporate pocket to keep each hybrid owner quiet.

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    Temporarily Banned Vaughn's Avatar
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    Default Re: Leasing vs Buying a car

    the point is that there ARE already Honda hybrid owners who are coming back to dealers with battery failures.
    Oh really. Proof please.

    which tends to indicate that the number of Honda hybrid owners that are experiencing out of warrantee battery failures must be substantial.
    Once again, proof please.

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    Banned Melonie's Avatar
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    Default Re: Leasing vs Buying a car

    is a quote from a Honda exec good enough proof for you ?

    {snip}"Toyota's manager of alternative fuels and specialized vehicles, Vic Johnstone, concedes the batteries, like the car itself, are built to last less than a decade. "The life of the car and the battery are supposed to be the same... around 8 to 10 years," he said. (snip)

    "A high percentage of hybrid vehicles brought to Australia so far have ended up in government hands. In fact Toyota believes government and business fleets will account for around 50 percent of all Prius purchases. Fleet managers turn over their vehicles after 2-3 years, meaning unsuspecting second hand buyers will be stuck with an unexpected and unwanted bill down the track."{snip}

    from

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    Temporarily Banned Vaughn's Avatar
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    Default Re: Leasing vs Buying a car

    The fact is a hybrid battery is proven technology that when maintained can last almost indefinitely because they don't have a fixed and limited number of charge cycles like a regular battery.
    Last edited by Vaughn; 08-22-2006 at 04:21 PM. Reason: cleaning to stick to just the facts

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    Banned Melonie's Avatar
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    Default Re: Leasing vs Buying a car

    OK so you and your 'objective' link are right, and myself and a Honda exec are wrong --- who am I to argue !

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    Temporarily Banned Vaughn's Avatar
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    Default Re: Leasing vs Buying a car

    Quote Originally Posted by Melonie
    is a quote from a Honda exec good enough proof for you ?

    {snip}"Toyota's manager of alternative fuels and specialized vehicles, Vic Johnstone, concedes the batteries, like the car itself, are built to last less than a decade. "The life of the car and the battery are supposed to be the same... around 8 to 10 years," he said. (snip)

    Link please. Based on your numerous fasle statements, lies and anti "green" propogandaI don't trust you one itty bitty tiny bit on these kinds of subjects.

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    Banned Melonie's Avatar
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    Default Re: Leasing vs Buying a car

    the link hasn't changed ...

    PS I WAS wrong, in that the comment was made by a Toyota hybrid division exec, not Honda. This probably correlates to the fact that Toyota only warrantees their batteries for 5 years vs Honda's 8 years.

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